UBS downgrades Home Depot (HD 37.20) to Reduce from Neutral, based on a housing slowdown

UBS downgrades Lowe's (LOW 29.05) to Reduce from Neutral, based on a housing slowdown

JP Morgan downgrades Audible (ADBL 7.73) to Underweight from Neutral

Stifel cuts their ests and tgt on DE to $97 from $105, saying the primary subject of their est cut is the Deere Construction & Forestry division, which is normally 20% of DE's equipment profits. In FY06, firm estimates that C&F will be 45% of equipment profits, however, they believe the segment is "over-earning."

Piper Jaffray raises their tgt on RIMM to $116 from $100, and raises their FY07-08 ests, citing checks indicating strong RIMM device sales as well as their belief that new smartphone products will launch at additional North American carries in the coming months. Hinnasiht ei pane just hõiskama. Negatiivseid kommentaare saab täna ka PALM.Piper Jaffray says that based on their monthly handset channel checks, they believe Palm Treo sales were solid at Sprint during Oct, but Treo sales were weak at Verizon and Cingular. Overall, firm believes that PALM sales trends are tracking in-line with their Nov qtr pro forma EPS of $0.22.

Banc of America cuts their ests on HD and LOW below the Street due to lower comp expectations given the difficult environment, as evidenced by their vendors' Q3 reports (and housing mkt datapoints) and lower gross margin as vendors push through price increases. However, firm maintains their ratings and targets because they believe the stocks effectively discount this outlook. Firm says TGT takes the place of WMT ahead of HD in their top picks list

-- Carol Moseley-Braun, Former Democratic Senator from Illinois who lost and subsequently became ambassador to New Zealand and Samoa.

The primary focus of the market this week will be politics. It is widely anticipated that the Democrats will win control of the House of Representatives, but not the Senate although it will take a few seats. The Republicans have gained a little in the most recent polls but it will truly be an upset if they hold on to the House.

The general belief on Wall Street is that the Democrats are a negative for the stock market because they tend to favor higher taxes, especially on capital gains, and also because they tend to favor restrictions on big business such as windfall profit taxes on oil companies and price controls on drug companies. There is little doubt many of the Democratic policies are not stock market friendly but does that mean the stock market is going to have a major negative reaction should they win?

Probably not.

Simply because the Democrats gain some seats and even control of the House doesn't mean they can pass anything they want. They can make more noise about their policies, and with control of Committees, they can even hold hearing on things like impeaching President Bush (as likely new Judiciary Committee head, John Conyers, has stated he favors). That might make for headlines but power is still balanced enough that the end result is nothing will happen.

Does that mean the election is a non-event for the market? To some degree probably, but there is likely to be some nervousness when it comes to the effect on certain market segments. And if the Republicans pull off a surprise, the market may even enjoy a short-term pop.

The most important thing about the election is that historically the market has done quite well in the fourth quarter once the election distraction is out of the way. It makes sense because the President's party almost always loses seats and that sets up a good change for gridlock -- and if there is one thing Wall Street loves, it is a less meddlesome government.

We'll likely get some short-term volatility off the election this week but as long as power remains mixed, it is unlikely to have any major impact on the market. Many on Wall Street have Republican leanings so their mood will be affected in the short term and that may cause some reactions, especially tomorrow morning.

Perhaps anticipation about the election was the reason the market suffered a bit of a breadown. We pulled back mildly although steadily and dip buyers showed unusual restraint. Whether this was just some healthy consolidation or the start of something more we have yet to see, and the best test will come on a bounce like we are having this morning. I seldom trust Monday morning bounces to last and I will be watching closely for the bears to hit it with some selling.

Overseas markets are higher across the board this morning and oil is down a bit despite another statement from OPEC that it plans to cut production. ---------Lisaks veel tänased suuremad liikujad:

Navteq Corp., which makes navigation systems for cars, said Monday it is buying Traffic.com, a traffic information provider, for $179 million in cash and stock.The company said the acquisition will give it proprietary traffic content with the technology to deliver it. Navteq will pay $47 million in cash and issue 4.1 million shares of its stock to finance the deal, which is expected to cut into 2007 earnings by 11 cents to 17 per share and add to net income by 2009.